Accounting For Share Capital - Introduction Video Lecture - Class 12

let's take a company accounts and the
first topic failure is accounting for
share capital now I'll start with issue
of shares the practical aspects relating
to the issue of shares her shares can be
issued either for cash issue option is
or cash or for some other consideration
right but we will now look at the first
case which is a chef shares for cash
whenever shares are issued shares can be
I mean I mean the money for the shares
can be paid in lump sum or in
installments so when the share money is
failing lump sum the whole money is
received in one installment generally
the cases that we have is when these
shares are issued and the shares are
payable in installments
snoring lump sum right so let's now look
at that
whenever the shares are payable the same
money that is are the value of the share
is paid in installment
there are generally four installments or
maybe three right the first one is
application money a lot milk money share
first fall and share second and final oh
hey
these are the four installments that we
have supposing the value for a shared is
like let's say supposing a company
issues 10,000 equally shares of rupees
then each over this and each payable as
group is Cle on application little stool
on allotment and the balance in the
first and final form now look at this
here here they have given the value of
the share is how much ten rupees right
the application money is rupees three
allotment one is rupees 5 and here there
is no second coal there is only the
first fall
the first fall itself is the final goal
so the balance is satisfied so five is
called fall and e first and final four
right so now here you have got three
installments in which the share money is
asked for so whenever someone is
applying for the shade they will give
only the application money then the
allotment
money becomes you at that point the
allotment money will be paid right and
when the company falls for the share
first fall in that case the first fall
money will be paid now the important
thing here is the journal entries
for bezel
journal entries as in when we receive
the money or when the money becomes due
right so the first thing that you see
here is background a bitch to shape
application account now this is on the
receipt off or you can write being money
received on application of shapes okay
so in our earlier case like I said
10,000 shares have been issued and
routed through your application means
this will be 10,000 into 3 that is
30,000 requests right okay now after
that when the shares are allotted once
the applications are asleep after that
Bashir's are noted when the shares are
allotted the share application money is
transferred to the share capital account
so share application debit share capital
account this 30,000 is transferred to
the share capital okay fine
now this is your this is basically
shares-a-lot it and application money
transferred to share capital account
right after that the a lot rent money
right now the allotment money is how
much you purse to the number of shares
is ten thousand so now here you have
first of all a lot of it money will
become view and then the shareholders
will pay for that
so the shareholders will be intimated
that a lot will money has become you now
well over the allotment money becomes
Julian clears share a lot went around a
bit to share capital account right here
it is twenty thousand ten thousand into
two so this is being the shared
allotment money becoming you right after
that the receipt of the money so when we
receive the share a lot with money got
installment we say bath I found a bit
who shared a lot with account so the
move would hold money is received means
twenty thousand here twenty thousand
you're right okay this is
on receipt of a lot milk money now the
same way when the first all money
becomes June this will be in our easy to
share first and final call accountable
right to share oh sorry
yeah to who share capital account the
balance the question said and the
balance of the first and final course in
the balance is how much this is 3 + 2 5
so 5 rupees is the balance so fire
officials for 4 in the first and final
thoughts of this becomes 5 into 10
thousand so that is 50 thousand right so
vo you will write share first and pile
it all money becoming do like this right
now on the application of that money you
will have back down David Suchet it
first and finally I found it is fifty
thousand right now in this question we
have only the first and final call if at
all you hide the second call then
laughing also um right the same way for
the if if if they had been a second fall
right it would have been something like
this shared second step if call will
always be the final call they won't have
more than two calls right share it say
in and final call account to share
capital business for the money becoming
you right and then you see - honey you
will write back on give it to share
second and final call like this hey
these are the journal entries which we
record for they ship shares for all the
installment bathroom this is on the
receipt cough
sher second and final for money
understand so this is how we make the
journal entries for all the installments
now I will take a bunch more examples
for example here
let's see
ajit and Sons Ajit and Company Limited
they invited applications for 25,000
shares of the value of rupees 10 each
right
the amount is payable as with this three
all application which is on an outlet
and the balance will be first and final
form okay the show goes fully subscribed
and cash bonds do you see - no the
right you have to give the journal
entries for the above and ranch in it
right okay now let's see this is 25,000
shares and the application money is
rupees 3 so the first entry will be back
found a bit to share application account
right so that's basically how much
25,000 into 3 that comes to 75 thousand
rupees this is the receipt of the
share application money being shared
applications money received right okay
after that this money is transferred to
the share capital account share
application accommodated through share
capital account this is the second entry
you have just seventy five thousand is
transferred them to share capital on the
allotment of Chase
so this transferring is done when the
shares are actually about it being the
share application money transferred Gugu
share capital on allotment of shapes
right after that the a lot with money
becomes given the allotment only little
jewelry right share and augment account
David who shared capital account
now that is twenty five thousand shares
and the allotment money is rupees for so
that rs.25000 into 4 which is 1 lakh it
is 1 lakh so here you have the narration
will be a lot more money becoming
beautiful
the receipt of the allotment money so
that is bank account debit to share a
lot with right that is how much 1 lakh
fight and then you have the final call
shared first and final for the coming
you share first and final call account a
bit to share capital of heart now you
had the application honey s3 allotment
money esposo clickless 4s7 the balance
of soup is three right so twenty five
thousand three here is seventy-five
thousand again right and this is
seventy-five thousand this is the first
and final fall money becoming do right
becoming duty after that you have bank
account debit oh
first and final all account to this 75
house right so this way this is the
receipt of their money on the share
first and final form so this way this
question will be solved the journal
entries will be given the seat off first
and final time when so this is a simple
of first read an issue of share capital
where all the shares have been
subscribed for and all the money has
been receiving machine is so in our next
session we will be taking up more topics
on this accounting of share capital
so for wrong today I'll end the session
whereby